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Naspers invests R16 billion into Russian online classified platform

by , 23 October 2015

This morning, media and internet company Naspers announced a deal worth around R16 billion that will make it the biggest shareholder in Russia's biggest online classified platform, Avito.

The deal will make Naspers the largest shareholder in the Russian company.

Let's take a closer look at the deal…

Naspers will acquire Avito shares from other shareholders

Naspers [JSE:NPN], which is “the largest media group outside of the US and China,” is set to become the biggest shareholder in Avito, reports IOL. The deal is costing Naspers some $1.2 billion (R16.2 billion).

Naspers is acquiring shares from other shareholders in Avito, says BDLive. This will raise its current stake of 17.4% in the company, to 67.9%.

One of the shareholders Naspers is set to acquire shares from is Kinnevik, a company based in Stockholm, says MoneyWeb. It currently holds a “31% stake in Avito”.

The deal will raise Naspers exposure to Russia’s “online retail market,” notes Bloomberg. Even though the Russian “economy remains in turmoil”.

Naspers already has a “29% stake in Mail.Ru Group,” adds MoneyWeb. This is “Russia’s largest operator of social networks”.

What does Avito do?

Avito was a platform for general classifieds, but over the past two years, it’s moved into classifieds verticals and is a key “player in five key verticals: General goods, auto, real estate, jobs and services,” reports Fin24. On a monthly basis, Avito has about 35 million unique visitors and 8.6 billion page views.

The Russian company posted annual revenue growth of 76% in its latest financial year, with high profit margins, notes IOL.

Naspers is making the move as it expects the e-commerce market in Russia “to grow significantly,” says BDLive. It forecasts e-commerce ratios to “move in line with other large countries”.

Shares in Naspers didn’t show much reaction to the news, trading 0.89% higher at R1,999.82. A move in line with the Top 40 Index.

Time will tell if Naspers new acquisition pays off as the company continues to expand.

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Naspers invests R16 billion into Russian online classified platform
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